# What is runway?

> Runway is how many months you can keep going before the money runs out: cash divided by net monthly burn. How to calculate it, for startups and solo makers.

**Runway**: Runway is how many months a business can keep operating before it runs out of cash, at its current net burn rate.

Runway is how many months a company, or a founder, can keep going before the money runs out, at the rate it is spending now.

## The short definition and formula

**Runway (months) = cash in the bank / net monthly burn**

**Net burn** is what goes out each month minus what comes in. With $60,000 in the bank, $9,000 of costs a month and $4,000 of revenue, net burn is $5,000 and runway is 12 months. **Gross burn** is the $9,000 before revenue; it tells you how fast you would run out if revenue stopped.

When revenue covers costs, net burn is zero or negative, and runway stops counting down.

## Runway for indie makers

For a solo founder the company and the person often share a bank account in practice. The useful version counts personal costs too: rent, food, health insurance, taxes. Savings divided by monthly living costs minus product income is how long you can work on this before you need a job or a client.

It is also the number that makes the side project versus full time decision concrete. If [MRR](https://makerhandle.com/glossary/mrr) covers half your costs, your savings last twice as long, and each new customer extends it.

## Making it longer

There are only two levers: spend less or earn more. Cutting tools you do not use and hosting you over-provisioned is quick. Raising prices for new customers, moving people to yearly plans (cash up front) and cutting [churn](https://makerhandle.com/glossary/churn-rate) all bring cash forward or keep it.

Recalculate monthly. Runway that was 18 months in January is not 18 months in June unless revenue grew to match.

## Sharing it

Some founders who [build in public](https://makerhandle.com/glossary/build-in-public) share runway alongside revenue, because "eight months left" is a story people follow. If you share revenue, make it a number people can trust: makerhandle shows MRR straight from your payment provider with a check mark, see [how to verify startup revenue](https://makerhandle.com/blog/how-to-verify-startup-revenue).

## Questions

### How do I calculate runway?

Divide the cash you have by your net monthly burn, which is monthly costs minus monthly revenue. $60,000 and a $5,000 net burn is 12 months.

### What is the difference between burn rate and runway?

Burn rate is how much cash you lose per month. Runway is how many months your cash lasts at that rate.

### What is gross burn vs net burn?

Gross burn is total monthly spending. Net burn is spending minus revenue.

### How much runway should a startup have?

There is no fixed rule. Founders commonly aim for enough to reach the next milestone, such as profitability or a funding round, with a margin for things taking longer than planned.

---

Source: https://makerhandle.com/glossary/runway
makerhandle: makerhandle is a link in bio for makers and founders: every project with its status and revenue verified from Stripe, Paddle and more.